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1997 Annual Report—Federal Reserve Bank of DallasTime Well Spent
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| — | Robert D. McTeer, Jr. |
| President and Chief Executive Officer |
Queen Elizabeth owned silk stockings. The capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within the reach of factory girls in return for steadily decreasing amounts of effort.
—Joseph Schumpeter
Capitalism, Socialism, and Democracy
As America exits the 20th century, we'd be hard-pressed to find a five and dime store. Penny candy now goes for a nickel. Five cents no longer buys a good cigar. Dime novels can't be found. Even a 3¢ stamp costs 32¢. Over the century, prices have gone up. The buying power of a dollar is down. We know this from statistical measures of inflation. We know it also from Grandpa's stories about paying 15¢ for a ticket to Gone With the Wind or 19¢ for a gallon of gasoline. Even a casual observer of the U.S. economy can see that the prices of milk, bread, houses, clothes, cars, and many other goods and services rise from year to year.
The cost of living is indeed going up—in money terms. What really matters, though, isn't what something costs in money; it's what it costs in time. Making money takes time, so when we shop, we're really spending time. The real cost of living isn't measured in dollars and cents but in the hours and minutes we must work to live. American essayist Henry David Thoreau (1817-62) noted this in his famous book, Walden: "The cost of a thing is the amount of. . .life which is required to be exchanged for it, immediately or in the long run."
The shortcoming of money prices is that they mean little apart from money wages. A pair of stockings cost just 25¢ a century ago. This sounds wonderful until we learn that a worker of the era earned only 14.8¢ an hour. So paying for the stockings took 1 hour 41 minutes of work. Today a better pair requires only about 18 minutes of work. Put another way, stockings cost an 1897 worker today's equivalent of $22, whereas now a worker pays only about $4. If modern Americans had to work as hard as their forebears did for everyday products, they'd be in a continual state of sticker shock—$67 scissors, $913 baby carriages, $2,222 bicycles, $1,202 telephones. (See Exhibit 1: The High Cost of Living, 1897 Style.)[1]
The best way to measure the cost of goods and services is in terms of a standard that doesn't change—time at work, or real prices.[2] There's a regular pattern to real prices in our dynamic economy. When a product first comes onto the market, it's typically very expensive, affordable for only society's wealthiest. Soon thereafter, though, its price falls quickly and the product spreads throughout society. Once the good or service becomes commonplace, its price usually continues to fall, but at a slower rate. This tendency shows up in such everyday purchases as housing, food, clothing, gasoline, electricity and long-distance telephone service. It also applies to manufactured goods—automobiles, home appliances and the modern age's myriad electronic marvels. And year after year it takes less of our work time to buy entertainment and services-movies, haircuts, airline tickets, dry cleaning and the like. In a very real sense, the cost of living in America keeps getting cheaper. By harnessing the natural power of income distribution, free markets have routinely brought the great mass of Americans products once beyond even the reach of kings.[3]
Americans come in all shapes and sizes. We differ in height and weight, gender, race and age. We vary in talents, skills, education, experience, determination and luck. Quite naturally, our paychecks differ, too. Some of us scrape by at minimum wage, while movie stars, corporate chieftains and athletes sometimes make millions of dollars a year.
In appraising the nation's cost of living, it's what the average American can afford that matters. Calculations of the work time needed to buy goods and services use the average hourly wage for production and nonsupervisory workers in manufacturing.[4] A century ago this figure was less than 15¢ an hour. By 1997 it had hit a record $13.18, a livable wage but nothing worthy of Lifestyles of the Rich and Famous. What's most important about this wage is that it represents what's earned by the great bulk of American society. (See Exhibit 2: Average Hourly Wages, 1897–1997.)
In calculating our cost of living, a good place to start is with the basics—food, shelter and clothing. In terms of time on the job, the cost of a half-gallon of milk fell from 39 minutes in 1919 to 16 minutes in 1950, 10 minutes in 1975 and 7 minutes in 1997. A pound of ground beef steadily declined from 30 minutes in 1919 to 23 minutes in 1950, 11 minutes in 1975 and 6 minutes in 1997. Paying for a dozen oranges required 1 hour 8 minutes of work in 1919. Now it takes less than 10 minutes, half what it did in 1950. The money price of a 3-pound fryer chicken rose from $1.23 in 1919 to $3.15 in 1997, but its cost in work time fell from 2 hours 37 minutes to just 14 minutes. A sample of a dozen food staples-a market basket broad enough to provide three squares a day-shows that what required 9.5 hours to buy in 1919 and 3.5 hours in 1950 now takes only 1.6 hours. (See Exhibit 3: Our Daily Bread.)
Americans' homes sell for a lot more than they once did. In 1920, the median price of a new house was $4,700. Forty years ago, as America moved to the suburbs, a typical family paid $14,500 for a new house. Today, the median price is up to $140,000. Housing inflation has outstripped the rise in wages, so the comfort of a roof overhead must be getting more expensive, right? Not really. Today's homes are more expensive, but they're also a lot bigger, so for comparison purposes their price must be expressed in cost per square foot.[5] By that measure, the work-time cost of new homes fell from 7.8 hours in 1920 to 6.5 hours in 1956 and 5 hours in 1970, but then rose to 5.6 hours in 1996. (See Exhibit 4: Gimme Shelter.)
It's true that from 1970 to 1996 the work-time cost of a square foot of housing rose just over half an hour. It's a mistake, however, to jump to the conclusion that the trend toward greater value in housing ended a generation ago. These days we're getting more home for our money. Today's new homes are more likely to come with central heat and air-conditioning, major kitchen appliances, a garage, an extra bathroom or two, ample insulation, storm windows and many other extras. The basic price of today's new homes includes these amenities, so it's impossible to calculate exactly what's happened to the real cost of housing. But it's a safe bet that the added features more than offset the extra 10 percent of work time. And families have continued to get smaller over the past quarter century. Taking into account the shrinkage in average household size, an individual's housing cost, expressed in work time, is actually 6 percent cheaper today than in 1970. Two-thirds of Americans now own their own home—the highest percentage in history and up from 45 percent in 1920.
Much of what's in our homes is getting cheaper, too. Over just the past 27 years, consumers have benefited from work-time declines of 60 percent for dishwashers, 56 percent for vacuum cleaners, 40 percent for refrigerators and 39 percent for lawn mowers. (See Exhibit 5: Domestic Servants.) The cost of a twin mattress and box spring fell from 161 hours in 1929 to 78 hours in 1957, 42 hours in 1970 and 24 hours in 1997. A room air-conditioner now costs less than 4 hours of work for each 1,000 BTUs, down from 7.5 hours in 1970 and more than 40 hours when first introduced in 1952. Since entering the market, portable radio prices have declined from more than 13 hours to less than 1 hour of work.
There are bargains in the closet as well. After aviator Charles Lindbergh became the toast of two continents by flying solo from New York to Paris in 1927, he toured the United States in a Hart Schaffner & Marx suit that cost $42.95. It would have taken an Average Joe 79 hours to buy that outfit. Today the same company sells comparable suits for $525, the equivalent of 40 hours of work. Over the past century, the work-time cost of a pair of Levi's jeans has fallen by nearly 7 hours, to 3 hours 24 minutes.[6]
With basics such as these costing less, more of our budgets can go toward other products. In 1901, the average family spent three-quarters of its income on food, shelter and clothing. Almost a century later, it's little more than a third.
When people talk about the high cost of living, they're usually talking about the cost of living high. But moving beyond the basics, in the currency of work time almost everything else we buy is getting cheaper, too. Take transportation.
If any invention has made its mark on American culture, it's the automobile. We consider it our birthright to own a car—often two or three. Within a few years, the United States will likely become the first country to have more vehicles than people.[7] In 1908 a typical factory worker had to toil more than 2 years to buy Ford's Model T, one of the nation's first affordable cars.[8] A 1997 Ford Taurus costs today's worker just 8 months. Of course, few of us would pay even $850 for a Model T today, at least not for everyday transportation. Today's cars are just so much better. Going back only one generation, we can see an enormous improvement in the quality of cars and trucks. Today's vehicles last longer. They require less maintenance, with some 1997 models traveling 100,000 miles before their first tune-up. They're more comfortable because of air-conditioning, power seats and adjustable steering columns. They often include such extras as power windows, sunroofs, tinted glass, cruise control and compact disc players. They're safer with the addition of air bags and antilock brakes, which have contributed to the decline in traffic fatalities from 7.6 per 100 million miles traveled in 1950 to 1.9 today. As with housing, part of the increase in auto prices stems from better quality. So although buyers are shelling out more money than they once did, cars have never been such good values. (See Exhibit 6: Kings of the Road.)
Drivers may grumble when they pull into a service station, but a gallon of gasoline required just 5.4 minutes of work in 1997, compared with 6.6 minutes in 1970, three years before the Arab oil embargo caused prices to surge. If we consider the 60 percent increase in average miles per gallon since 1970, the work time to drive a typical car 100 miles has been nearly halved over the past quarter century—from 49 minutes in 1970 to 28 minutes today. The price of an automobile tire has risen from $13 in the mid-1930s to about $75 today. However, today's steel-belted radials last more than 42,000 miles, a big increase from the 16,000 miles for the nylon tires of the 1950s or the 2,000 miles for the 31/2-inch, cotton-lined tires of the early 1920s. Based on work time per 1,000 miles, tires are now cheaper than ever.
Much of today's consumption centers on leisure. What helps make the good times good is the declining real cost of life's pleasures—little and big. The price of a movie declined from 28 work minutes in 1970 to 19 minutes in 1997. Compared with a generation ago, each 1,000 miles of air travel now requires 61/2 hours less work. A seven-day Caribbean cruise slipped from 51 hours in 1972 to 45 hours in 1997.
It's even getting cheaper to look our best: work time for dry-cleaning a dress is half what it was in 1946, and a woman's haircut is down 27 percent since 1950. Soft contact lenses have plummeted from more than 95 hours' wages in 1971 to less than 4 today—and the latest versions can be worn longer.
We're a nation on the go, grabbing fast food and snacks. Americans may be eating more of these foods because they're getting cheaper. Buying a large pepperoni pizza costs an eighth less work time than in 1958—and today we can get it delivered to our door. A 6.5-ounce bottle of Coca-Cola has declined from 5.5 minutes in 1920 to 3.5 minutes in 1970 to 1.5 minutes today. In 1940 Californians paid 30¢—nearly half an hour's wages—for the McDonald brothers' first burger—a one-eighth pounder. Today's one- fifth-pound Big Mac costs $1.89, the equivalent of just 8.6 minutes' work. The price of a Hershey's chocolate bar has risen from 10¢ to 45¢ over the past 23 years; still, its price in work time is a mere 2 minutes, a tenth of what it cost at the turn of the century. A five-stick pack of Wrigley's chewing gum has jumped from a nickel to a quarter since 1964, but its work cost has ebbed by 24 seconds. (See Exhibit 7: Food on the Go.)
Americans do, of course, have to work longer to buy some goods and services. Paying for higher education and medical care requires more hours of work than it used to. Tuition and fees at public colleges, for example, have doubled in terms of work time since the mid-1970s. Inflation has been even steeper at America's private institutions.[9] But such higher prices are rarely without justification. In many cases the quality of what we're getting for our money has improved.
Few of us would deny that medical care is better than it used to be. After all, the past quarter century has brought a wealth of new diagnostic tools and drugs to treat ailments that range from cancer to depression. But, given the general public's disenchantment with American education, the notion that what colleges provide students today may actually be worth more might raise eyebrows. An accurate measure of the cost of education would require extensive information about its quality, much of it subjective. One objective measure, however, is the value the economy puts on a sheepskin. Workers with a bachelor's degree earn an average of $16,504 a year more than high school graduates today, up from $10,488 more in 1979.
In looking at the work-hour cost of living, it's clear that most of the good news comes as products permeate the marketplace. In minutes of work, orange prices fell 63 percent from 1919 to 1938. It took another 60 years to match that decline. The work time required to buy a pack of Wrigley's chewing gum fell an average of 7 percent a year in the first two decades of the 20th century but less than 2 percent a year after 1920. The real price of a gallon of gasoline halved in the 21 years from 1920 to 1941; it took another 45 years to equal that. Still, it's encouraging that the real cost of most of these products has continued to drift lower.
Americans are always buying goods and services that are in the early stages of their product cycle. Often, money prices fall fast at first. A handheld calculator too bulky to fit easily into a pocket or purse sold for $120 in 1972.[10] A mere quarter century later, true pocket calculators sell for $10—cheaper than a slide rule was in 1952. A 25-inch color television with remote control went for as little as $299 in 1997, compared with $620 in 1971 and more than $1,000 for early color sets in the mid-1950s.[11] Videocassette recorders entered the mainstream market at $985 in 1978. Twenty years later, VCRs offering surer picture tracking, on-screen programming and other features cost less than $200. Cellular phones sold for $4,195 in 1984; they're available for $120 or less today. Better yet, the phones are often free for the price of monthly service, which itself has fallen to about half what it was a decade ago. These aren't isolated examples. Over the past generation, the sticker prices for microwave ovens, camcorders and many other items have fallen.
Combining falling prices with rising wages yields even more bounty for consumers. When prices are converted from dollars and cents into hours and minutes of work, many of the modern age's signature products become spectacular bargains. In terms of time on the job, the calculator's price plummeted from 31 hours in 1972 to 46 minutes today, less time than it takes for lunch. The color television that required over 3 months' work to buy in 1954 was down to 1 month by 1971; today the work-time cost is just 3 days. VCRs sell for 15 work hours, or almost 90 percent less than in 1978. Over the past 13 years, the work time required to buy a cell phone has declined 98 percent. It took an average worker more than 176 hours on the job to buy a microwave oven in 1967; now it's 15 hours. Dad had to work 57 hours in 1960 to buy a camera to take home movies—a Bell & Howell model that used Kodak film and required a separate projector. Today, 42 hours of work will buy a camcorder that preserves our memories on a handy cassette that slips into the family's VCR.
Computing power provides perhaps the most vivid example of something getting cheaper as it becomes an everyday product. A circa 1970 IBM mainframe, capable of 12.5 million calculations a second, sold for almost $4.7 million. Today, we can pay less than $1,000 for a personal computer capable of operating 13 times faster. In average work time, the cost of today's computing is down to 27 minutes for each 1 million calculations per second—a price likely to continue falling.[12] With the IBM mainframe of the 1970s, owning enough computing power to plow through that many calculations per second would have taken more than a lifetime of work.[13]
Whether it's calculators or computers, Americans today get the best of all worlds—better products for less effort. Commonplace consumer goods aren't likely to post spectacular price declines down the road, but the future will bring a new generation of products that will repeat the pattern of falling prices. Later this year, manufacturers will begin offering high-definition television, a technology that promises to deliver crystal-clear images into American living rooms. When HDTV sets hit the market, they will cost as much as a used car—about $5,000 to $10,000. Within a few years, the televisions will doubtlessly sell for a quarter or even a tenth of that. The hours of work required to own one, of course, will fall even faster.
The phenomenon of so many products becoming more and more affordable can't be simply dumb luck. To the contrary, we owe the prosperity of our times to the routine workings of our free enterprise system. In the labor market, the system spurs the increases in productivity that pull up wages. In the product market, it provides the incentive to innovate and the discipline to become more efficient. The benefits flow to American consumers in the form of better values—more for our money and more money for our time.
Just about all new goods and services go through a cycle of falling prices and improving quality as companies ratchet up to large-scale production, as markets expand, as competition arrives in the marketplace and as goods and services move from luxuries to everyday conveniences. Virtually every new product requires an up-front investment, often sizable, to cover the cost of getting started. Whether innovation springs from startups or established companies, it requires money for research and development as well as the physical plant, machinery, equipment and labor needed to launch production. The cost of reaching just the first customer ranges from a few thousand dollars for a mom-and-pop enterprise to billions of dollars for Fortune 500 companies.
New markets are initially small, so the fixed costs of introducing products are spread over relatively few consumers at first. Prices start out high. As markets increase in size, these fixed costs are spread over more and more sales. Larger production runs mean lower per-unit costs and economies of scale take hold. Success attracts competitors, kicking off a race to see which company can offer the best product at the lowest cost. Companies must slash prices to stay in business. As markets mature, it becomes more difficult to wring new efficiencies out of the production process, and producers aren't able to cut prices as much. The biggest declines in money prices and work-hour costs come in the early stages of a product's life cycle.
The United States had more than 360 automobile manufacturers in 1920, all sensing a fast-growing industry, all vying in a race that had no clear winners. Auto prices ranged from $200 for a Briggs & Stratton to $7,250 for a Pierce-Arrow. The companies that emerged from the fracas were those offering the highest quality at the lowest price. Hundreds dropped out of the market, but their loss didn't go to waste. Good ideas endured—the automatic transmission, the speedometer, four-wheel brakes—and were embodied in the products offered by industry survivors.
A relatively small number of consumers—typically the wealthy—are the first to acquire hot new products. In effect, they nurture infant industries and product lines by paying most of the fixed costs. For the rest of us, prices reflect only companies' added cost of producing what we want. The dichotomy helps explain why some sectors of the economy show steep price reductions while others go through the process more gradually. Big declines usually occur when fixed costs are high. It's true for computers. And electronics. And pharmaceuticals. And for many other products. When fixed costs aren't overwhelming, companies start out charging prices closer to marginal cost-a pattern that fits food and personal services.
Capitalism's critics often fret about the wealthy having too much, but uneven income distribution plays a role in developing markets. New products are usually very expensive—outside the reach of all but society's wealthiest. Henry Ford sold his first Model T for $850 in 1908. At the equivalent of more than 2 years' wages for ordinary factory workers, only 2,500 cars were sold. By 1920 Ford had incorporated numerous improvements into his sedan—including an electric starter, demountable rims and an enclosed body—yet cut its work-hour price by nearly two-thirds. Even with its extensive list of standard features, today's Taurus sells for less work time than either the Model T sedan or the 1955 Fairlane. And Ford has soundly answered critics' claims that the car is just a "rich man's toy." More than 92 percent of U.S. households own an auto; 62 percent own two or more. (See Exhibit 8: The Bounty of Time Well Spent.)
One more example helps prove the point. A 3-minute phone call from New York to San Francisco, for example, cost $20.70 when first available in 1915. Earning an average hourly wage of less than 23¢, the working stiff of that day would have had to labor more than 90 hours to afford a call. Yet long-distance telephone service did take root in the marketplace—and it grew. Somebody had to pay the high price, or the service would have been just another failed entrepreneurial gamble. In footing the initially high bill, the rich paid the fixed cost of bringing long-distance service to the masses in America. Today, of course, nearly all of us are "rich" enough to afford long-distance calls. A 3-minute coast-to-coast connection costs less than 50¢, or a scant 2 minutes of work.
Without society's wealthy, fewer new goods and services would find their way to the rest of us. Indeed, the wealthy's free spending spurs a democracy of consumption because it starts the process of lowering prices. As a result, today's average Americans have what only a few could once enjoy. The system harnesses the spending of a relative few and puts it to work delivering goods to the masses.[14] Far from being a blight on society, unequal income distribution is instrumental in driving society forward. It's a natural resource.
The true test of an economic system is how productive it is with people's time. The majority of us aren't born with big bank accounts, but we are born with time. Time is the real currency of life, and the value of our time—what we can acquire for its exchange—is our most important asset. Like a good steward, America's free enterprise system has consistently raised the value of our hours and minutes, making most goods and services affordable for the average worker. The result is a democracy of consumption.
In 1928, Herbert Hoover's presidential campaign promised Americans "a chicken in every pot . . . and a car in every backyard, to boot." Today, we have all that and much, much more—not by the grace of government but by the mechanism of markets.
When common labor supports the good life, it's truly time well spent.
—W. Michael Cox and Richard Alm
"Time Well Spent: The Declining Real Cost of Living in America" was written by W. Michael Cox and Richard Alm. The essay is based on research conducted by Cox, vice president and economic advisor, Federal Reserve Bank of Dallas. Thanks also go to Charlene Howell, Sergei Polevikov, Marci Rossell and Meredith Walker for help with this project.
American Petroleum Institute, Basic Petroleum Factbook-Petroleum Industry Statistics (Washington, D.C., 1995).
Burness, Tad, Cars of the Early Twenties (Philadelphia: Chilton Book Co., 1968).
Cherington, Paul W., Airline Price Policy: A Study of Domestic Airline Passenger Fares (Elmsford, N.Y.: Maxwell Reprint Co., 1958).
Coombs, Whitney, The Wages of Unskilled Labor in Manufacturing Industries in the United States, 1890–1924 (New York: Columbia University Press, 1926).
Davies, R. E. G., A History of the World's Airlines (London: Oxford University Press, 1964).
Friday, Franklin, A Walk Through the Park: The History of GE Appliances and Appliance Park (Louisville, Ky.: Elfun Historical Society, 1987).
Hudson, Kenneth, Air Travel: A Social History (Totowa, N.J.: Rowman and Littlefield, 1972).
Information Please Almanac, ed. Otto Johnson (Boston: Houghton Mifflin Co., various editions).
Lichty, Robert, Standard Catalog of Ford, 1903–1990 (Iola, Wis.: Krause Publications, 1995).
Love, John, Behind the Arches (New York: Bantam Books, 1986).
Munk, Nina, "A Convenience-of-Living Index?" Forbes, September 14, 1992.
National Bureau of Economic Research, "Estimates of Residential Building, United States, 1840–1939," Manuel Gottlieb, Technical Paper 17, 1964; "The Volume of Residential Construction, 1889–1950," David M. Blank, Technical Paper 19, 1954.
Public Roads Administration, Highway Statistics, Summary to 1945, 1947.
Schumpeter, Joseph A., Capitalism, Socialism, and Democracy (New York: Harper & Brothers Publishers, 1950).
U.S. Bureau of the Census, "Beyond Poverty, Extended Measures of Well-Being: 1992," Kathleen Short and Martina Shea, Current Population Reports, Series P70-50RV, November 1995; Census of Housing (various years); Historical Statistics of the United States, 1789–1945, 1949; Historical Statistics of the United States, Colonial Times to 1970, Bicentennial Edition, 1975; Statistical Abstract of the United States (various editions).
U.S. Bureau of the Census and U.S. Department of Housing and Urban Development, Characteristics of New Housing (various years).
U.S. Department of Energy, Energy Information Administration, Housing Characteristics (various years).
U.S. Department of Labor, Consumer Expenditure Survey; Employment, Hours, and Earnings, United States, 1909–1984, Vol. I; Employment and Earnings; "How Family Spending Has Changed in the U.S.," Evan Jacobs and Stephanie Shipp, Monthly Labor Review, March 1990; New Housing and Its Materials, August 1958.
U.S. Department of Transportation, National Personal Transportation Survey, 1995.
The World Almanac and Book of Facts 1997, ed. Robert Famighetti (Mahwah, N.J.: K-III Reference Corp., 1996), "U.S. Computer Sales and Ownership, 1983–96."
Page 3
The High Cost
of Living, 1897 Style
1897 Sears, Roebuck Catalogue.
Page 4
Average Hourly
Wages, 1897–1997
U.S. Bureau of the Census (Historical Statistics
of the United States: 1789–1945); and
U.S. Department of Labor (Employment, Hours,
and Earnings, United States, 1909–1984,
Vol. I; Employment and Earnings).
Average Weekly
Wages by Industry, 1897
Coombs 1926.
Page 5
Our Daily Bread
U.S. Department of Labor.
Page 6
Gimme Shelter
National Bureau of Economic Research; U.S. Bureau
of the Census and U.S. Department of Housing and
Urban Development; U.S. Department of Energy;
U.S. Department of Labor (New Housing and
Its Materials).
Page 7
100 Kilowatt-Hours
of Electricity
U.S. Department of Energy; U.S. Bureau of the
Census (Historical Statistics of the United
States, Colonial Times to 1970).
Mattress and
Box Spring
1929 Beautyrest mattress and Ace box spring and
1957 Beautyrest mattress and box spring: Simmons
Company (king set prices are for two twin sets).
1970 Simmons 100th Anniversary Deluxe: Life,
July 24, 1970. 1997 Simmons Beautyrest Super Premium
series: Dallas-area retailer.
Air-Conditioner
1952 5,500 BTU GE model and 1970 6,000 BTU GE
model AGKE106AA: Life, June 26, 1970.
1997 6,000 BTU GE model: Dallas-area retailer.
Page 8
Domestic Servants:
Range
1910 Hughes Electric Heating Co. three-burner
stove and portable oven: Carnegie Library of Pittsburgh,
Science and Technology Department. 1950 GE model
and 1970 GE model J339L: Life, June 26,
1970. 1997 GE model JBSO3GY: Dallas-area retailer.
Dishwasher
1913 Walker Bros. model: Friday Historical Business
Archives. 1954 GE model and 1970 GE model GGSM353L:
Life, June 26, 1970. 1997 GE model GSD4320Z:
Dallas-area retailer.
Refrigerator
1916 Guardian 9.2 cu. ft. refrigerator, 1958 Frigidaire
14.2 cu. ft. model FP-142-58 and 1997 20 cu. ft.
Frigidaire model FRS200QRC: Frigidaire Home Products.
1970 Kenmore 16.3 cu. ft. model W46H60740N: Sears
Catalog.
Clothes Washer
1911 Thor Electric Home Laundry Machine No. 1-1/2:
Carnegie Library of Pittsburgh, Science and Technology
Department. 1956 GE model and 1970 GE model WWA8400L:
Life, June 26, 1970. 1997 GE model WBSR
1060T: Dallas-area retailer.
Clothes Dryer
1940 GE model AD-3: Friday Historical Business
Archives. 1956 GE model and 1970 GE model DDE8100L:
Life, June 26, 1970. 1997 GE model DWXR473
E/G: Dallas-area retailer.
Page 9
Dry-Cleaning
a Dress
Base price for dry-cleaning a plain dress (no
pleats): International Fabricare Institute.
Man’s
Suit
Hart Schaffner & Marx suit. Dallas retailers,
Hart Marx, History Channel.
Levi’s
Levi Strauss & Co.; Dallas-area retailers.
Page 10
The Share for
Food, Clothing and Shelter
U.S. Department of Labor (“How Family Spending
Has Changed in the U.S.”; Consumer Expenditure
Survey).
Page 11
Kings of the
Road
Dallas Ford dealers; Lichty 1995; Ward’s
Automotive Reports, various issues.
Auto Rental
One week, unlimited mileage, return to same city.
1970 Ford sedan: Life, July 24, 1970.
1997 Ford Taurus: Hertz Corporation.
A Gallon of
Gasoline
American Petroleum Institute 1995.
Page 12
Movie Ticket
Motion Picture Association of America; U.S. Bureau
of the Census (Historical Statistics of the
United States, Colonial Times to 1970).
Woman’s
Haircut
Museum of Cosmetology Arts and Sciences, St. Louis,
Mo.
Soft Contacts
1971: Consumer Reports, May 1972. 1997:
Lens Express, Inc.
Page 13
1,000 Miles
of Air Travel
Air travel is 1,000 miles domestic average price.
Air Transport Association of America; U.S. Bureau
of the Census (Historical Statistics of the
United States, Colonial Times to 1970; Statistical
Abstract of the United States, various issues).
Coast-to-Coast
Flight
One-way, New York to Los Angeles. Cherington 1958,
American Airlines.
7-Day Caribbean
Cruise
Miami port-of-origin, excluding airfare: Carnival
Cruise Lines.
Page 14
University
Education
University of Texas at Austin, full-time undergraduate
tuition and fees for a state resident for academic
year: UT–Austin, Office of Institutional
Studies. U.S. public and private institution full-time
undergraduate average tuition and fees for academic
year at 4-year universities (state resident, where
applicable): U.S. Department of Education, National
Center for Education Statistics.
Page 15
Food on the
Go:
Snacks
Coca-Cola Company, Frito-Lay, Inc., Hershey Foods
Corporation, Wm. Wrigley Jr. Company.
Big Mac
McDonald’s Corporation.
Large Pepperoni
Pizza
Pizza Hut Totally New Pizzas. Prices are estimates.
Page 16
Color Television
1954 RCA 12-inch model LT-100 and 1971 RCA 25-inch
model FQ545: Friday Historical Business Archives.
1997 RCA 25-inch model F25209WT: Dallas-area retailer.
VCR
1972: Radio Electronics, July 1972. 1978:
Consumer Reports, September 1978. 1984:
Sears Catalog. 1990: Sears Catalog average. 1997:
J. C. Penney Catalog average.
Home Movie
Camera
1960 Bell & Howell Electric Eye Family Camera:
Ritz Collectibles. 1977 RCA BW002: Friday Historical
Business Archives. 1997 RCA Pro 854: Thomson Consumer
Electronics, Inc.
Page 17
Calculating
Devices
1916 Burroughs Class Three adding machine: Charles
Babbage Institute. 1952 Frederick Post Co. Versalog
slide rule: Sphere Research Corp. 1972 TI-2500
calculator and 1996 TI-1795 calculator: Texas
Instruments.
Microwave
Oven
1997 model is Amana model FBG623T: Amana Appliances.
Cellular Phone
1984 Motorola DynaTAC 8000X portable phone and
1997 Motorola StarTAC 6000: Motorola, Inc.
Pages 18 and 19
Sale! 10%-90%
Off!
The Work-Time Cost of Products, Today Versus Yesterday
Early camcorder is Realistic model 150 Compact
MovieCorder. Mattress is twin-size. Computing
comparisons are based on minutes per MIPS, 1997
versus 1984. Phone call is 3-minute coast-to-coast
call.
Page 19
Computer
1944 IBM Mark I, 1970 IBM System/ 370 model 165,
1984 IBM PC AT and 1997 IBM Aptiva model E24:
International Business Machines Corporation.
Page 21
3-Minute Coast-to-Coast
Phone Call
Daytime, New York to San Francisco. AT&T Corporate
Archives; U.S. Bureau of the Census (Historical
Statistics of the United States, Colonial Times
to 1970; Statistical Abstract of the
United States).
Page 22
The Bounty
of Time Well Spent:
Household Ownership and Use of Products
American Association of Home Appliance Manufacturers;
Cellular Telephone Industry Association; Electrical
Merchandising, various issues; Information
Please Almanac; Public Roads Administration;
Television Bureau of Advertising; U.S. Bureau
of the Census (Census of Housing; Current
Population Reports; Historical Statistics of the
United States, Colonial Times to 1970; Statistical
Abstract of the United States); U.S. Department
of Energy; U.S. Department of Transportation.
See Exhibit Notes and Data Sources for product details.
Page 4, 1904
Westinghouse factory, Library of Congress, Motion
Picture, Broadcasting, and Recorded Sound Division.
Page 6, 1920 house, Library of Congress,
Prints and Photographs Division.
Page 8, 1910 range, 1913 dishwasher and
1940 clothes dryer, Friday Historical Business
Archives, Louisville, Ky.; 1916 refrigerator,
Frigidaire Home Products; 1911 clothes washer,
Ron Lutz, Lee Maxwell Washing Machine Museum,
Eaton, Colo.
Page 11, all cars, courtesy of Ford Motor
Company.
Page 12, 1954 movie theater, Sony Loews
Theatres; 1920 woman’s haircut, Museum of
Cosmetology Arts and Sciences, St. Louis, Mo.
Page 13, 1930 plane and airport, C. R.
Smith American Airlines Museum; cruise, image
copyright © 1997 PhotoDisc, Inc.
Page 15, hamburger, McDonald’s
Corporation; pizza, Pizza Hut Totally New Pizzas.
Page 16, 1954 color television, Friday
Historical Business Archives, Louisville, Ky.;
1997 VCR, used by permission of Thomson Consumer
Electronics; 1960 home movie camera, The Sears
Roebuck Co.
Page 17, 1952 slide rule supplied by
David Truly; 1972 and 1996 calculators, courtesy
of Texas Instruments; 1947 microwave oven, Amana
Appliances; 1984 cellular phone, Motorola Museum
of Electronics © Motorola, Inc.
Page 19, all computers, courtesy of International
Business Machines Corporation. Unauthorized use
not permitted.
Page 20, auto, courtesy of Ford Motor
Company.
Page 20, radio, and page 21,
telephone, Library of Congress, Prints and Photographs
Division.
The Federal Reserve Bank of Dallas is one of 12 regional Federal Reserve Banks in the United States. Together with the Board of Governors in Washington, D.C., these organizations form the Federal Reserve System and function as the nation's central bank. The System's basic purpose is to provide a flow of money and credit that will foster orderly economic growth and a stable dollar. In addition, Federal Reserve Banks supervise banks and bank holding companies and provide certain financial services to the banking industry, the federal government and the public.
Since 1914, the Federal Reserve Bank of Dallas has served the financial institutions in the Eleventh District. The Eleventh District encompasses 350,000 square miles and comprises the state of Texas, northern Louisiana and southern New Mexico. The three branch offices of the Federal Reserve Bank of Dallas are in El Paso, Houston and San Antonio.
Federal Reserve Bank of
Dallas
2200 North Pearl Street
Dallas, Texas 75201
(214) 922-6000
El Paso Branch
301 East Main Street
El Paso, Texas 79901
(915) 544-4730
Houston Branch
1701 San Jacinto Street
Houston, Texas 77002
(713) 659-4433
San Antonio Branch
126 East Nueva Street
San Antonio, Texas 78204
(210) 978-1200
